Seven tips for investing an inheritance

Mull the tax consequences and the investment merits, and above all don't rush.

Christine Benz 8 September, 2017 | 5:00PM

"What should I do with the money I inherited from my mom?" my friend texted me. "The cheque has been sitting on my sideboard for two months."

Her paralysis is understandable. Many people who inherit assets are still processing the loss of their loved ones; investing the money may seem like the furthest thing from their minds, or an unpleasant reminder of the permanence of the loss. If the inheritance is particularly large, it may swamp the other assets in the investor's portfolio.

And while my friend's cash inheritance was straightforward, the logistics of inheriting other types of assets can be bewildering: Inherited RRSPs, in particular, come with a web of complicated rules. If you inherited actual securities, you'll have to figure out whether to keep them as part of your portfolio or trade them for something else. You'll also have to weigh any short-term spending wishes for the money against the wisdom of socking all or part of the money away for the future.

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About Author

Christine Benz

Christine Benz  Christine Benz is Morningstar's director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.